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Reports have emerged that Barry Silbert of the Digital Currency Group (DCG) has bought stake in an actual bank – San Diego-based commercial bank, Silvergate Bank.
This is a huge step for the crypto world considering that DCG will be able to deliver banking services to crypto startups and companies that are currently facing hardships owing to reluctance of a lot of banks to serve crypto companies. Further the investment by DCG in Silvergate Bank is being pegged at somewhere around $100 million and this is just a quarter of what Circle paid for Poloniex. While the Poloniex acquisition will have a nationwide impact, but DCG’s investment in Silvergate Bank is being seen as a major step that will go a long way for DCG as well as Silvergate Bank.
Silvergate Bank hasn’t directly revealed who bought the 9.5 million shares that were sold in a private placement, but DCG voluntarily offered a hint to their 29,000 twitter followers by stating “welcome Silvergate Bank to the DCG family of companies.”
The bank said that the private share sale has generated broad based support from both traditional bank investors and other strategic investors. What this ‘support’ means isn’t clear, but it does indicate that Silbert has made a strategic investment and this investment will cause many crypto companies in California to knock on the Bank’s doors for services. The bank is known to have a somewhat forward looking when it comes to crypto companies and has been offering them bank accounts when others were more reluctant to do so.
The bank still has a long way to go if it wants to offer such services across the nation, but as far as Silicon Valley is concerned, they are already well placed to generate a lot of buzz among crypto startups and companies.
